Taxation of high value residential property

The Government will introduce two new bands for the Annual Tax on Enveloped Dwellings (ATED). Residential properties worth over £1m and up to £2m will be brought into the charge with effect from 1 April 2015. The charge for these properties in 2015/16 will be £7,000. Properties worth over £500,000 and up to £1m will be brought into the charge with effect from 1 April 2016. The charge for these properties in 2016/17 will be £3,500. These charges will be increased in line with the CPI each year.

The Government will also extend the 15% SDLT rate applied to residential properties purchased by certain non‑natural persons to properties purchased for over £500,000 with effect from 20 March 2014. It will extend the related CGT charge on disposals of properties liable to ATED for residential properties worth over £1m and up to £2m with effect from 6 April 2015 and for residential properties worth over £500,000 and up to £1m with effect from 6 April 2016. The Government will consult over summer 2014 on possible options to simplify the administration of ATED.

Tax-Free Childcare

It has been confirmed that the Tax‑Free Childcare costs cap, against which eligible parents can claim 20% support, will be increased to £10,000 per year for each child.

This will mean that eligible parents can now benefit from greater support, worth up to £2,000 per child from Autumn 2015. Tax‑Free Childcare will be rolled out to all eligible families with children under 12 within the first year of the scheme’s operation.

Help to Buy scheme

The Help to Buy: equity loan scheme will be extended to March 2020 with the aim of helping a further 120,000 households to buy a new‑build home.

Employee share schemes

From 6 April 2014 the maximum value of shares that employees can acquire under all‑employee Share Incentive Plans (SIPs) will be increased to £3,600 on the ‘free’ shares companies can award to employees; and £1,800 on the ‘partnership’ shares employees can purchase.

Ebbsfleet Garden City

Britain’s first new garden city since Welwyn Garden City in 1920 will be built in Ebbsfleet, Kent. The new city will contain 15,000 homes. The Government will set up a dedicated Urban Development Corporation for the area, in consultation with local MPs, councils and residents, and will make up to £200m of infrastructure funding available to kick start development.

New £1 coin announced

The Government has announced the proposed introduction of a new £1 coin. The new coin will be roughly the same size as the current £1 coin, with a 12‑sided design based on the old ‘thrupenny bit’. It will have a bi‑metallic construction, of two colours, and the Royal Mint claims it will be ‘the most secure coin in the world’. The existing £1 coin, which has been in circulation for over thirty years, is considered to be too vulnerable to counterfeiters.

The Government will consult on the new coin in detail and expects to introduce it in 2017.

Increased help for exporters

In an attempt to make UK Export Finance (UKEF) more competitive the Government will double the size of UKEF’s direct lending scheme to £3bn, remove the scheme end date, relax conditions on loan sizes, and lend at the minimum interest rates allowed by international agreements.

It also aims to work in partnership with the banks to deliver the enhanced lending scheme to ensure that smaller companies can also benefit from the scheme, and to consult on changes to the legislation governing UKEF to allow the organisation to support individual export supply chains and intangible exports.

Users of failed avoidance schemes

Finance Bill 2014 will introduce legislation that will enable HMRC to issue a ‘Follower Notice’ to any taxpayer for whom there is an open enquiry or appeal and who has used a tax arrangement that, in HMRC’s opinion, has been found to fail by another judicial decision relevant to their case, thereby determining their dispute. The notice will inform the taxpayer that they should amend their return or agree to resolve their appeal in line with the court’s decision.

The notice will require the taxpayer to pay the tax in dispute within 90 days, or a further 30 days where the taxpayer requests that HMRC should reconsider the ‘Follower Notice’ or the amount of the payment notice.  Where the matter is under appeal, the measure will operate so as to remove any postponement of the disputed tax. Penalties will apply for late payment.

Accelerated payment in tax avoidance cases

Legislation will be introduced in Finance Bill 2014 to enable HMRC to issue a ‘Notice to Pay’ to any taxpayer for whom there is an open enquiry, or the matter is under appeal, and who has claimed a tax advantage by the use of arrangements that fall to be disclosed under the Disclosure of Tax Avoidance Schemes (DOTAS) rules or are counteracted under the General Anti-Abuse Rule (GAAR).

The notice will require the taxpayer to pay the tax in dispute within 90 days, or a further 30 days where the taxpayer requests that HMRC should reconsider the amount of the payment notice.  Where the matter is under appeal, the measure will operate so as to remove any postponement of the disputed tax. Penalties will apply for late payment.

Flood defences

The Government will increase funding by £140m over 2014/15 and 2015/16 to repair and maintain flood defences.

Potholes challenge fund

The Government will provide an additional £200m in 2014/15 to set up a ‘potholes challenge fund‘ to allow local authorities to repair up to 3.2m potholes following the severe weather. This includes an allocation to devolved administrations.

Mersey Gateway Bridge

The Budget announced approval of a guarantee of up to £270m to support the Mersey Gateway Bridge.

Alan Turing Institute

The Government will provide £42m over 5 years for the Alan Turing Institute. This will be a national institute which will undertake new research in ways of collecting, organising and analysing large sets of data (‘Big Data’), with the aim of enabling businesses to enhance their manufacturing processes, marketing and efficiency.

Real Time Information(RTI)

Micro businesses have been granted additional time to comply with HMRC’s new RTI reporting requirements. 
Under RTI, employers must submit their PAYE information to HMRC on or before the day of payment. HMRC previously granted temporary relaxation of the RTI regulations for employers with fewer than 50 employees who pay their staff weekly or more regularly and find it difficult to report at the time of payment.

These employers have been allowed to send information by the date of their regular payroll, but no later than the end of the tax month. While this relaxation of the rules will come to an end as planned in April 2014, HMRC has since announced that eligible micro businesses will now be given until April 2016 to prepare for RTI. Until this time they may submit PAYE data on or before the last payday in the tax month. The concession will not apply to businesses that start up during this period.